Registrant gives ground in fight over 'sex.biz'

It has been reported that the Korean owner of the domain name 'sex.biz' has come to an agreement with the US owner of a SEX trademark, which limits the Korean party's use of the domain name. It seems that the registrant, an individual named Il-Ho Jeong, has accepted the terms of the agreement as he was unable to meet the mounting legal costs of protracted litigation in both the US and Korean courts.

Jeong successfully entered a lottery for 'sex.biz' in March 2002 beating over 100,000 other competitors. Jeong refused many offers to sell the domain name since he intended to use it for his own business. However, in September 2002 Marcus Schatte, a US citizen and the owner of a US registration for the trademark SEX, initiated arbitration proceedings at the National Arbitration Forum (NAF) in order to have the domain name transferred. A NAF panel upheld the complaint and ordered the transfer of 'sex.biz' (see 'Sex.biz' transferred to SEX trademark owner).

Jeong entered an action against the NAF decision before the Seoul District Court in Korea, insisting that as "the word sex is a general term ... it cannot be protected as a ... trademark". However, prior to the decision of the Seoul District Court, Schatte brought a trademark infringement action before a US district court in Virginia, where Neulevel - the company that manages the sale of '.biz' domains - is located. The court found in Schatte's favour but the decision was given before Jeong had received a copy of the petition and he was thus unable to defend his rights in the proceedings.

Meanwhile, the Seoul District Court found in Jeong's favour (see Seoul District Court overturns NAF 'sex.biz' decision). However, the decision subsequently proved to have no legitimacy because Korean courts have no legal authority over domain name registries in the United States. Jeong therefore lodged a nullity suit against the Virginia district court's judgment citing defective procedure and also lodged another suit claiming that the court should uphold the Seoul District Court's decision. The district court accepted the nullity suit but dismissed Jeong's other action. Jeong incurred around $80,000 in legal expenses.

It now appears that, unable to bear the cost of further legal action, Jeong has come to an agreement with Schatte. Although the contents of the agreement have not been made available to the public, it is believed that it severely limits Jeong's use of the 'sex.biz' domain name.

Yoon Bae Kim, Kims and Lees, Seoul